As per a recent amendment, the Competition Appellate Tribunal (COMPAT) has ceased to exist effective 26 May 2017. The appellate function under the Competition Act, 2002 (Competition Act) would now confer to the National Company Law Appellate Tribunal (NCLAT). These amendments were brought about under the provisions of Part XIV of Chapter VI of the Finance Act, 2017. Accordingly, Sections 2(ba) and 53A of the Competition Act and Section 410 of the Companies Act, 2013 (CA 2013) have been appropriately amended and various other provisions of the Competition Act dealing with the COMPAT have been omitted. Further, Section 417A has been introduced in the CA 2013 and deals with the qualifications, terms and conditions of service of the Chairperson and Members of the NCLAT.

Previously, all appeals against specified orders of the Competition Commission of India (CCI) would lie to the COMPAT whereas the NCLAT dealt with, inter alia, appeals arising out of orders of the National Company Law Tribunal (NCLT) under the CA 2013 as well as the Insolvency and Bankruptcy Board of India (IBBI) under the Insolvency and Bankruptcy Code, 2016.

Khaitan Comment

There will be a transition phase during which all pending matters before the COMPAT stand transferred to the NCLAT. During this period, all such matters will be heard afresh by the NCLAT.

Further, the details regarding the procedural formalities followed by the NCLAT, including filings, are provided in the NCLAT Rules, 2016 (Rules). The Rules primarily pertain to CA 2013, and for a smooth transition of matters from COMPAT to NCLAT, as well as fresh filings, an amendment to the Rules would be required. For instance, it is not clear what the filing fee would be for an appeal filed with the NCLAT under the Competition Act.

There is also a perceived lack of clarity regarding the manner and the timelines in which these transferred matters will be dealt with by the NCLAT, given that the NCLAT is already burdened with adjudication of appeals arising out of the NCLT as well as the IBBI. This brings to the fore concerns about whether the administrative machinery of the NCLAT is equipped to deal with the additional authority that has now been assigned to it. At present, the NCLAT has only two members i.e., one Chairperson who is a retired Supreme Court judge, and one other technical member. The Central Government is empowered to appoint up to eleven members to the NCLAT, including the Chairperson.

In order to deal with the additional responsibility of adjudicating appeals under the Competition Act, it may be helpful to now increase the number of members of the NCLAT. The NCLAT may also have multiple Benches, including a dedicated Bench for matters under the Competition Act. Amendments to the Rules, bringing them in tune with the Competition Act would go a long way in easing procedural formalities.